Transcript F178 PROJECT

ELECTRONIC MONITORING
OF EXPORTS – PHASE 2
OF THE PILOT PROJECT
Updated 2006-10-01
1
INTRODUCTION - AIMS

Electronic matching and monitoring of exports.

Replace the present paper-based and manual
system of Form F178s with an electronic system.

Attesting and acquitting of Form F178 by
AD/bank fall away.

Streamline the export procedures – no Form
F178.
Updated 2006-10-01
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INTRODUCTION - REGULATORY
REQUIREMENTS

In terms of Regulation 6, Treasury prescribes a declaration to
be completed in respect of goods exported.

Form F178 format prescribed in terms of Section 5 of the Order
and Rules under the Exchange Control Regulations.

Presently Forms F178 administered by the Authorised Dealers
(“ADs”).

ADs monitor repatriation of export proceeds within the
prescribed time limits.
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INTRODUCTION - PROPOSAL
5
4
AD reports
export
proceeds
SARB
2
1
RESIDENT
EXPORTER
SAD 500
data to
SARB
NONRESIDENT
IMPORTER
3
CUSTOMS
SAD 500 Only
Goods
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4
INTRODUCTION - BACKGROUND
TO THE PROJECT

An alternative system became possible with the
implementation of the BoP System.

Planning and co-operation with Customs (SARS).

Necessary changes in legislation introduced.

Discussions
exports.
with
role
players
Updated 2006-10-01
involved
with
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INTRODUCTION - PILOT PROJECT
MAIN IDEAS

Basis of proposed solution is to replace the F178
with an amended DA 550/SAD 500.

Pertinent information on the Form F178 to be
captured on the DA 550/SAD 500.

Four additional features on the DA550/SAD 500:




Unique Consignment Reference (“UCR”) number
Transaction Value & Swift currency code
Receiving Bank & Bank Code
Credit Terms
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INTRODUCTION - PHASE ONE

Testing of system with a random group of exporters.

Lessons learnt from Phase 1:



Training in big groups not effective
Concerns of banks, e.g. interest claims
Other matters such as compliance, communication

Report to National Treasury with recommendations.

Approval to go ahead with Phase 2.
Updated 2006-10-01
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PHASE 2 - EXPORTERS INCLUDED
1) A target group of selected exporters +/- 200;
2) They consist of:
a) Exporters from Phase 1 that can match their
exports;
a) The biggest exporters in value terms;
b) Others based on defined criteria.
3) Closed Phase 1 and started Phase 2.
Updated 2006-10-01
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PHASE 2 - OTHER PARTICIPANTS
Freight agents:
 Any Freight Agent that is EDI accredited with
SARS.
Banks:
 All Banks that are Authorised Dealers in
South Africa.
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PHASE 2 - HOW ?
 By using a unique number as a link.
 The unique number is used when exporting and at
customs.
 The same unique number is supplied to the bank by
the exporter when receiving payment.
 The SARB uses the unique number to tie up exports
with receipts.
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PHASE 2 - HOW IS IT POSSIBLE?
 SARB receives two streams of data.
 Customs provide SARB with export data.
 Banks report to SARB on cross-border transactions.
Export data post-clearance
with ECN & UCR Nos.
ECN & UCR
CUSTOMS
Export proceeds with
ECN or UCR pre-clearance
& post- clearance
SA BANKS
SARB
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EXPORTING - WHAT IS THE
UNIQUE NUMBER?
 There are two types of unique numbers which
can be used for matching purposes.
 The general one is called the Export Control
Number (ECN).
 The other one is called the Unique Consignment
Reference Number (UCR).
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EXPORTING - WHAT IS AN
EXPORT CONTROL NUMBER (1)?
1) The ECN is generated by Customs.
2) It is available only post-clearance.
3) It is on the Customs Release Notification.
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EXPORTING - WHAT IS AN
EXPORT CONTROL NUMBER (2)?
1) It consists of three parts:
a) The Final Date – must be 8 digits, e.g., 20051129;
a) The District Office – must be 3 digits, e.g., PTA, DBN;
a) The Final Number – must be 7 digits, e.g.,0002566.
2) The three parts combined make up the 18 digits:
- 20051129PTA0002566.
Updated 2006-10-01
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EXPORTING - WHAT IS UCR
NUMBER?
 The UCR is created by the exporter / his agent and
is available to exporters both pre and post-clearance.
 A UCR is created for every export consignment.
 It’s minimum length is 12 and maximum is 21 digits.
 The UCR field is alpha-numeric and must not contain
any special characters such as “/, \, -, *,” etc.
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EXPORTING – THE FOUR PARTS OF
A UCR (1)
1) Part 1 = the 1st digit:

it is the last digit of the year of the export – i.e., ‘5’ for 2005.
2) Part 2 = the next 2 digits:

it is the SWIFT code of the country of export , i.e. ‘ZA’ for S.A
3) Part 3 = is the next 8 digits:

it is the exporter’s customs client code , e.g., ‘00011111’ .

Note! If the customs client code is less than 8 digits, then
zeroes (0’s) must be added in front to make up 8 digits.
4)
5 ZA00011111 454
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EXPORTING – THE FOUR PARTS OF
A UCR (2)
1) Part 4 = next 10 digits:

Last digits must reflect the unique number of the
document that the exporter will use to link export proceeds
with a specific export consignment. It can be an invoice,
quotation, order, shipment no., etc. - e.g., ‘454’ if that
invoice is the link.
2) The four parts combined make up the UCR 5ZA00011111454
5ZA00011111454.
3) It is on the SAD 500 & CRN.
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EXPORTING - THE DA550
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EXPORTING - THE NEW SAD 500
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EXPORTING - THE NEW SAD 500
BOX 28. FINANCIAL DATA
UCR
5ZA00011111454
TRANS VALUE
12,000,000
000
ZAR
RECEIVING BANK
STANDARD
016
CREDIT TERMS
VAT
CLAIM
030
ADV
NEP
FROM
001 UP TO 180
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EXPORTING - SUMMARY
FOR EXPORTS ON CREDIT
1stleg: Physical Export
RESIDENT
EXPORTER
2nd leg: Payment for goods
1
3
5ZA00011111454
R 1,000,000.00
RESIDENT
EXPORTER
5ZA00011111454
R 1,000,000.00
2
Payment
advice
4
SARB
Non SA
NON-RESIDENT
IMPORTER
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PAYMENT - TRANSACTIONS FLOW
Advice of
payment
EXPORTER
TT
or...
SA
BANK
Auth’
Payment
FOREIGN
BANK
IMPORTER
Drawing
under LC /
Rand Drafts
GOODS AND DOCUMENTS
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PAYMENTS - TYPES OF EXPORT
PAYMENTS

Payment per export (1 to 1).

Advance, pre-payments, progress payments, etc.

Partial payments.

Bulk Payments.

They are not mutually exclusive.
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PAYMENT - BANK & CLIENT
MATCH PAYMENTS AGAINST
ORIGINAL SAD 500 DETAILS
AND ECN OR UCR REF NO.
EXPORTER
INSTRUCTION TO
CREDIT CFC OR
CONVERT TO ZAR
& CREDIT CURRENT
A/C, ETC.
MUST PROVIDE
ECN / UCR REF NO
AND/OR CUSTOMS NO
ADVICE
OF
PAYMENT
AD
BANK
SARB
BOP REPORTING
WITH ECN / UCR NO
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PAYMENT - WHEN TO REPORT
UCR NUMBERS TO YOUR BANK!
 Before the money is credited into your account.
 When you complete the integrated form (and provide
ECN/UCR details for Rand drafts.)
 Telephonic instructions to your bank, etc.
 Desk-top systems of communications with banks.
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PAYMENT - INFO EXPORTERS MUST
REPORT TO THE BANK
 The ECN/UCR number:
e.g.
ExportControlNumber
5ZA00011111454
 Customs Client number / exporter’s code;
e.g.
Customs client number 11111
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PAYMENT - INFORMATION BANKS
MUST REPORT TO THE SARB
•The ECN/UCR number:
5ZA00011111454
ExportControlNumber
•Customs client number/exporter’s code:
Ad Hoc Requirement
Subject
EXPORTPROCEEDS
Export Proceeds
Description
11111
Updated 2006-10-01
11111
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COMPLEX SCENARIOS - ADVANCE
PAYMENTS
 The order-shipment-payment cycle, applicable to
exports on credit terms, is changed.
 Payment is received prior to Customs clearance,
when no export documentation is available.
 Not possible to use the ECN as a matching number
because it is not available when funds are received.
 Must use the UCR for matching purposes.
COMPLEX SCENARIOS- SUMMARY OF
ADVANCE PAYMENT AND EXPORTS
2nd leg: Physical Export
1st leg: Payment for goods
3
RESIDENT
EXPORTER
1
Same UCR Number
when exporting
RESIDENT
EXPORTER
UCR Number
4
2
CUSTOMS
Non SA
Payment
advice
Goods
SARB
SA BANK
NON-RESIDENT
IMPORTER
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COMPLEX SCENARIOS - PARTIAL
PAYMENTS
 Partial Payments involve a many-to-one relationship
(many payments to one export).
 System accommodates partial payments.
 Any number of payments within credit period or 180
days.
 Ensure that the same UCR number is reported for all
relevant partial payments.
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COMPLEX SCENARIOS VARIANCES & THE QUERY CYCLE
ADVICE OF PAYMENT
BANK
1st QUERY
DIRECTED
TOWARDS
BANKS AS
PER SAD 500
INSTRUCTIONS TO CREDIT CFC OR CONVERT
TO ZAR and CREDIT CURRENT A/C etc.
MUST PROVIDE ECN/UCR REF No./CUSTOMS NO
EXPORTER
BOP
REPORTING
WITH ECN/
UCR No.
SARB
2nd QUERY
DIRECTED
TOWARDS
EXPORTERS
MATCH PAYMENT AGAINST
ORIGINAL SAD 500 DETAILS
and ECN/UCR REF NO
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FINAL MATTERS – EXPORTERS &
THEIR RESPONSIBILITIES
 Decide how by whom UCR numbers will be created.
 Departments / divisions must communicate.
 Meet with your bank & freight forwarder regarding your
participation in Phase 2 of this pilot project.
 When you receive export proceeds, you must report
your UCR & Customs numbers to your bank SARB.
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FINAL MATTERS – CHALLENGES
EXPORTERS MAY FACE
1) System Issues:

Will the choice of UCR numbers be system-driven or
created manually?
2) Training & Information:


Information gaps in companies;
Adequate training and continuity plans.
3) Compliance:


Incorrect, incomplete or multiple UCR nos on the SAD 550;
Incorrect capturing of UCR nos on BOP system.
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CONDITIONS - FOR PARTICIPATION
 Commitment to comply.
 An agreement has to be entered into.
 Interview with exporter, their bankers
and freight agents.
 SARB to monitor.
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CONDITIONS – MAIN FEATURES OF
THE AGREEMENT (1)
 Legal document modelled on the export undertaking.
 Formal approval to substitute the F178 with the SAD
500.
 Duty of the AD to attest Form F178 suspended.
 Funds to be credited to the exporter’s accounts
subject to exporters providing bank with a valid
ECN/UCR and/or Customs client number.
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CONDITIONS - MAIN FEATURES
OF AGREEMENT (2)


The SARB may, when the need arises, call for:

Additional information from your bank;

Periodic export schedule from the exporter;

An auditor’s report on your exports.
Hedging is not covered.
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